How Do Hospitals Cope with Sustained Slow Growth in Medicare Prices?

Objective

Primary Data Source

Medicare hospital cost reports (1996–2009).

Study Design

For each hospital, we quantify the year-to-year price impacts from changes in the Medicare payment formula. We use cumulative simulated price impacts as instruments for Medicare inpatient revenues. We use a series of two-stage least squares panel data regressions to estimate the effects of changes in Medicare revenues among all hospitals, and separately among not-for-profit versus for-profit hospitals, and among hospitals experiencing real price increases (“gainers”) versus decreases (“losers”). Read more